Death Benefits

Death is generally not something we like to think about, but it is important that you plan for it, especially if you have family who depend on you.

The Benefit Your Dependants Will Receive

Your dependants will receive a benefit equal to:

• Your Fund Credit (your accumulated retirement savings in the Fund); plus
• If you are an in-service member (not a deferred beneficiary) and you are aged below 89, an insured lump sum equal to a multiple of your annual pensionable salary. As from 1 April 2025, the multiple is 5.0 times your yearly pensionable salary — this multiple may change from time to time depending on the cost of insurance.

The Trustees will usually choose to pay benefits as a lump sum (subject to tax), but will take steps to safeguard the benefits allocated to any minor dependants.

How the Death Benefit is Allocated — Section 37C

The Trustees have complete discretion as to how the benefit will be allocated to your dependants and nominees. This power is derived from Section 37C of the Pension Funds Act, which requires Trustees to allocate any retirement fund benefit to those persons (usually your immediate family) who were most financially dependent on you.

The Trustees will look at your Nomination of Beneficiaries form to see who you nominated to receive some or all of your money. However, the law clearly states that it is up to the Trustees to decide who gets the money and how it will be shared — they are not obliged to follow the Nomination Form, although it will provide them with useful guidance as long as it is complete and up to date.

It is most important that you complete and keep updated a Nomination of Beneficiaries form. Forms are available from the Fund's Administrator (AlexForbes) or from the HR Department of your legislature. You can update your form whenever there is a change in your personal circumstances — marriage, divorce, birth of a child, etc.

Important Points to Note

• Should the cost of the insured benefits increase above the State's 4.8% contributions allocated to insured benefits, the level of the Insured Death Benefit may be reduced (as occurred with effect from 1 January 2023).
• The insurer may require a medical examination before providing death cover. The Trustees will inform you in writing if medical information is required — this is very unusual.
• Insurance exclusions may be imposed, and deaths may not be covered in certain rare circumstances.
• Insurance cover ceases on your 89th birthday.

Insurance Restrictions

The benefits are subject to the detailed conditions in the Fund's Group Life insurance policy. The main restrictions are:

• Death as a result of nuclear, chemical and biological terrorism, or of active participation in war or warlike activities, will not be covered.
• If you join the Fund as a new member and, in the insurer's opinion, you are unable to carry out the duties of your office because of injury or illness and you die before recovering, the insurer will not provide a benefit.
• Insurance cover ceases on your 89th birthday.

The tax treatment of the death-in-service benefit is explained on the Taxation of Benefits page.